In re: Insider Trading

I might have mentioned before, not sure, but in my Business Associations class (former class as we finished on Monday, or current maybe as the exam hasn’t been taken, nevermind, anyway) we had talked a bit about insider trading, and our Prof. brought up the interesting subject of the Irish futures market on predicting the Supreme Court nominations (see here and a discussion with some interesting comments on if its betting, trading, or legal here), which he used to find the next Justices correctly, apparently because of inside information, the key component that leads to the accurate information. Of course the SEC has made insider trading illegal, although it was not always this way. I only bring this all up now as there was an interesting story about how Sportsbook.com stopped wagering (different from the Irish futures market? maybe only in technicalities, Intrade, the Irish site claims to trade contracts which are payable on events) on the TIME person of the year due to insiders maxing out their bets. (See story here)
The whole idea of whether insider trading should be allowed or not was a hot topic (at least among a few of us law folks when the subject came up in class) There are clearly good arguments to allow the transactions as it gets information and fair prices into the market quicker, but there are many problems as well. Professor Bainbridge of UCLA had a discussion on his blog about this awhile ago (available here)
But I would only wonder why anyone without information would want to get into a market where they are clearly at a disadvantage? Oh wait, thats what happens in Vegas, so I guess people will anyway.

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